Seven weeks ago, City of Toledo officials, including Mayor Mike Bell and a host of councilmen, were dead set against backing a $10 million loan for the owners of the former Fiberglas Tower to clean up and renovate the vacant skyscraper downtown.
The discussion seemed closed on that part of a $44 million redevelopment plan as soon as Council President Wilma Brown likened it to the city's $1 million annual obligation on three Toledo apartment buildings that it has been paying from its general fund since the early 2000s.
The city expects to continue paying the debt until at least 2025 on the Commodore Perry, Hillcrest, and Museum Place, and it will own none of the buildings.
But today, backing for the federal $10 million loan for the Eyde Co. of Lansing will return to the table, and the Bell administration appears to have warmed up to the idea.
“Before, we did not have as much dialogue,” Mr. Bell said yesterday. “I had had very little dialogue on that particular project so I wasn't going to make any assumptions from the previous administration on what should or should not happen with that building.”
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Council's economic development committee and neighborhoods committee have scheduled a joint meeting on a proposal from the Eyde Co. for today at 2 p.m.
In August, 2008, Eyde, owner of the building, announced a plan to remake the onetime Owens Corning headquarters into a complex that would include a 96-room hotel, a restaurant, and market-rate residential units.
Nick Eyde, whose family owns the company, said they need the city to approve a change to the project's one-year action plan, which simply allows them to apply for the $10 million before a July 6 deadline.
“We don't want to miss an opportunity for an economic development project, which is what Toledo hasn't had in a long time,” Mr. Eyde said Tuesday.
He said Marriott International Inc. has expressed interest in opening a hotel in the building.
“It's been vacant a long time — 13 years — and every year we pay quite a bit of money just to hold that building,” Mr. Eyde said.
“It's 390,000 square feet of vacant space, and not only do property taxes cost money, it costs money to operate the building and even keep heat on.”
He said asbestos removal began last month and will take a year to complete.
He toured the building yesterday with a representative of the Lansing office of project management firm Parsons Brinckerhoff.
Toledo City Council unanimously agreed on March 17, 2009, to accept a $3 million grant from the Clean Ohio Revitalization Fund to help pay for cleanup of the building.
Eyde Co. was to supply $1 million to match the grant.
The renovation project would be funded through a number of sources. Mr. Eyde said he would provide council with an updated plan today.
The previous plan released May 3 showed:
≺ $10 million from a 20-year, Section 108 loan from the federal Department of Housing and Urban Development.
≺ $2 million from a Brownfield Economic Development Initiative grant, which can be used to pay the interest on the Section 108 loan.
≺ $7.277 million in new market tax credits.
≺ $5.381 million in federal historic tax credits.
≺ $6.407 million in Ohio state tax credits.
≺ $3 million from an economic development grant.
≺ $1 million from a climate-control energy efficiency grant.
≺ $3 million from a Clean Ohio Revitalization Fund grant.
≺ $750,000 from Clean Ohio Assistance Fund.
≺ $1.5 million developer contribution.
≺ $3 million developer equity.
≺ $1.49 million developer deferred fee.
Dean Monske, Toledo's deputy mayor for external affairs, said if the project were to fail, the city would not be on the hook for the balance of the loan and interest.
That contradicts what council was told during a May 3 economic development meeting.
At that time, council was told that if the project were to fail, the city would be responsible for the balance of the loan and interest and would have to pay it off with its Community Development Block Grant funding, which is distributed through HUD and then funneled by the city to different nonprofit organizations.
“We came to council with this, and the mayor was 100 percent against this,” Mr. Monske said. “He said we are not going to be on the hook for one penny like the projects they already talked about, and that's basically what council said.”
Since then, Mr. Monske said, the Bell administration learned the city would be protected.
“In order to take advantage of that [Section] 108 loan, $10 million worth, you first have to apply, and in order to apply for it you have to change your one-year action plan through HUD,” he said. “If you don't have it in the plan, you can't do it, so we are saying, ‘Let me change the plan so I can apply for it.'”
Council would months from now have the final say-so on whether the funds are released, Mr. Monske said.
Mr. Eyde added that “the city will have the first mortgage on this property, whereas it didn't have that on the Museum place [or] Hillcrest.”
Some on council are still hesitant.
“I am wary of putting the city's community development block grant funding at risk, but I am willing to listen to the proposal because obviously revitalization of the Fiberglas Tower would be very beneficial for downtown Toledo,” said Councilman Joe McNamara.
Councilman Rob Ludeman, chairman of council's economic development committee, said approving the change to the action plan won't obligate Toledo to repay any loans.
“They have a July 6 deadline to make application for any of the HUD 108 funds that in order to do that we would simply need to give them permission to move ahead and apply,” he said.
“It doesn't mean we are accepting the funds and turning them over. That is the second step in the process.”
Councilman D. Michael Collins said he probably would vote against the company's request.
“We were not supposed to be under any exposure for Hillcrest, Commodore Perry, and Museum Place,” he said. “I am not buying another pig in a poke.”
The building at Jefferson Avenue and St. Clair Street, now known as the Tower on the Maumee, has been vacant since 1996, when Owens Corning moved to its current campus-style headquarters on the Maumee River.
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